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February 2014

Focus and Reorganization Lead to $1 Million Cash Flow Turnaround

How Platinum Group is helping to preserve a family and regional legacy.

 

Situation

 

A $15 million, family owned and managed custom manufacturer was losing more than $400,000 in cash flow due to foreign competition, rising inventories and lack of operational discipline. Concerned about his viability and credit line, the owner returned to day-to-day management and removed an autocratic general manager. He also had a strong desire to preserve a family legacy business to encourage workforce vitality as the town’s biggest employer. His accountant referred him to Platinum Group for operational, strategic and organizational assistance.

 

Challenges

 
  • Organizationally, no one was accountable for business performance. The owner was unsure where money was being made or lost. And only a fraction of the new, integrated ERP system was being used.
  • Strategic focus was more opportunistic than disciplined. In recent years, 70 to 80 percent of revenue was tied to one customer that was fading quickly.
  • Cash flow problems arose as work-in-process and finished goods inventory grew – a result of a “push” system in the manufacturing plant.
  • Classic low-tech manufacturer had a culture of individual employee measurements and incentives that was driving up payroll costs, work-in-process and cycle times.
 

Read the full Case Study on our website.

Case Study

Platinum Group
952.829.5700 • 9855 W 78th Street • Eden Prairie, MN 55344
www.ThePlatinumGrp.com

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